“Everyone has a plan until they get punched in the mouth” was an infamous quote from former heavyweight boxing champion Mike Tyson. As it turns out, this quote appears to be summarizing what many project teams in recent years may be experiencing when attempting to develop Internet-of-Things (IoT) solutions.
McKinsey and Company, a management consulting firm, explains that the overall state of IoT adoption and value proposition realization is increasing, BUT at a slower rate than previously expected. We’ve known for some time that adoption has been impacted by uncontrollable component shortages driven by pandemic-induced disruptions in the supply chain. However, we now realize that the more significant obstacles challenging IoT innovations are internal. We can overcome these with strategic planning, thoughtful execution, and an organizational willingness to keep swinging in the face of challenges.
Problems Encountered with IoT Adoption
Department leadership is often aware of the relevance of IoT and its’ long-term value-adding potential in certain business use cases. However, the executive branch may not always see the organization-wide opportunities, or they may view IoT as the “flavor-of-the-month.” In these cases, the organizational level may be suspicious of an individual department’s desire to implement IoT projects. It may view projects like these as high cost and high risk. Risk is often associated with the unknown “will it work” factor. Combine this with the high cost of developing the solution, and the very contagious attitudes of caution and skepticism can quickly set in throughout an organization.
In some instances, executives will go along with an IoT project and agree to produce a minimal prototype to demonstrate a “try new things” attitude and commitment to innovation. But they then may elect to hold off on scaling the device or implementation for various reasons. Other common challenges involve the costly and challenging integration with in-house systems and potential new security threats.
Values Worth Fighting For
So, what type of tasks and businesses stand to gain the most from teams who persevere through IoT deployments? According to McKinsey and current data, its initiatives improved key business operation-oriented tasks within the industrial segment. Healthcare was found to be another top area ripe for adoption.
With direct expertise and experience in both of these segments, Hallsten Innovations can attest to the value waiting to be unlocked by leaders and teams in these areas that can push IoT innovations to the finish line. Whether it’s a new product dispenser used in healthcare settings, a data logger used in research and development, or a retrofit of a current design, our recent work reflects and aligns with the existing IoT adoption research.
McKinsey indicates IoT will drive a “5.5 to 12.6 trillion economic value impact by 2030.” The bulk of this value will come in the business operations optimization and healthcare segments. Despite the challenges, organizations in these segments can’t afford to view IoT as a “nice to have” but rather a necessary strategic focus to avoid forward-thinking competitor disruption.
Figure 1. IoT segment increases expected by 2030.
|Operations Optimization: Inventory management, MFG||30%- 40%|
How to Persevere
Let’s start with examining a few key points that illustrate why the time and conditions are ripe to center organizational strategy around IoT. Then, we’ll investigate how to persevere and navigate through the challenges.
IoT Technology is Better
Battery life, computing power with advanced analytics capability, and enhanced sensor abilities provide a solid foundation for an IoT project. There has never been a better and more considerable assortment of ways IoT can solve a long list of challenges.
Network Coverage Has Expanded
Communication options abound, whether it’s WIFI or cellular. There has never been a better time to adopt a cellular communication protocol via direct link or LORA gateway enablement. 5G networks are rolling out, and carrier pricing plans are competitive. An international company called TRUPHONE (https://www.truphone.com/us/) can allow multi-carrier access, so it’s no longer necessary to place all your IoT communication eggs in one basket.
Validated Value Proposition
Many customers already understand IoT’s value as they see it playing out in their everyday lives. Whether it’s within a smart home environment or checking into a ballgame or concert, all of us are looking for solutions to life’s vexing inefficiencies. As a result, we will gladly embrace opportunities and solutions to make daily work and play easier.
A Counter to Inflation – Which is Likely to Endure
Wage price pressure spawned by socioeconomic and political forces, along with human resource constraints, will continue to raise operational costs. While passing on increased costs may not always be viable, IoT-based automation is a robust strategy to offset labor costs.
A Few Challenges to Overcome
Embrace IoT change at the organizational level
We often see a single department lead struggling to gain approval for IoT projects that are understood to be key business enablers. These forward-thinking leaders often run into resistance at the executive levels due to reasons previously noted. Embracing an organizational IoT strategy will curtail these negative encounters and drive others to seek IoT implementation strategies across the business. Executives desiring to take ‘one-step-at-a-time,” if at all approach, may encounter that sinking feeling when the realization of competitors’ organizational IoT adoption is forthcoming and fast.
TIP: Set executive expectations early by stressing the importance of going “All In” on IoT across the organization. Ensure that leaders and the organization as a whole understand that half-hearted and siloed efforts will likely fail and wasted efforts for all.
Update legacy systems and retrofit where possible
Long-term Organizational value stemming from IoT project adoption will surpass the temporary costs of system integration. Retrofitting existing devices may be the most cost-effective method to test the technology while new devices with embedded IoT functionality are in development. Use the retrofit devices as a learning opportunity.
TIP: For existing technology critical to IoT solutions, understand the lifecycle stage these technologies are in to inform retrofit vs. replacement decisions. This understanding can be a helpful tool and lynchpin to gain buy-in from other department heads seeking additional rationale to upgrade dated infrastructure.
Security and privacy issues can be overcome
Build in security from the beginning and strategize the best way to manage user privacy. Adopt best practices and keep informed of the latest regulatory or technological developments.
TIP: Include security leadership representation within the cross-functional project team and identify their “non-negotiable” security technical requirements. This inclusion will help identify security-driven development areas to overcome or potential project constraints.
Chip Shortage, pandemic, and supply chain disruption
Understand that this is all believed to be a temporary or manageable situation. Continue to plan and develop, knowing that the supply chain issue will settle these issues in the coming months. Humanity and business endeavors will continue despite these disorders.
TIP: Work with experts with relationships and familiarity with the IoT component supplier landscape to identify component sourcing and technically acceptable alternative strategies.
We Can Help
Overwhelmed and not sure what to do next? Do you know there is incredible “pot-of-gold” value to be found in the adoption of IoT but not sure how to go about it? Never fear; Hallsten Innovations is here to help you sort through it.
Bring Us Your Napkins™
Is your team thinking about solving a business challenge with an IoT solution, but you are unsure where to start?
An excellent place to start is with what we call a Napkin. A napkin involves a rough sketch of your idea, concept, or vision. Hallsten Innovations would be happy to review your napkin idea and provide feedback.
Please send them our way or reach out for an introductory call by emailing email@example.com.
References for further investigation